LONDON — Social commerce platform Threads has raised $20 million in a series A round of funding from Highland Europe, also an investor in Matchesfashion.com and C Ventures, the fund founded by Adrian Cheng and Clive Ng to fuel the growth of creative businesses targeting Millennials and Generation Z consumers.
The London-based company is best known for providing personal shopping services to high net-worth Millennial and Gen Z customers via social media platforms. Its strategy is largely built around inspiring these young, digitally savvy shoppers by publishing carefully curated content on Instagram and further engaging with them, as well as completing transactions, via one-on-one WhatsApp chats.
Having built a highly engaged audience on these platforms — with transactions averaging $3,000 — the company is now furthering its ambition and looking to scale the business to reach more customers, particularly in the Asian and U.S. markets.
“Our funding strategy has always been to take the minimum investment that we needed, in order to first prove the concept of the business and grow more organically,” said Threads founder, Sophie Hill. “At this point we really felt that it was the right time to take a larger amount of funding and to really accelerate that growth, having built a solid foundation and a really loyal customer base. Now it’s about reaching more customers globally and engaging with them through new technology.”
The company plans to use the funding to build AI-powered chat bots to enhance the shopping experience it currently offers.
“We look after our clients in a very personal way, everything is done through one-on-one chats, but we want to utilize new technology to add more interactive features to our service,” Hill added.
The funds will also be used to grow Threads’ local London team, with plans to make 50 additional hires by the end of this year, as well as open offices in New York and Hong Kong.
Expansion in Asia is among the company’s key targets, which has been working on publishing new content on WeChat and growing its audience on the platform. This focus makes C Ventures the right partner, given Ng and Cheng’s extensive network and resources in the region.
“We’ve been really focused on our Asia expansion this year so [the move] was really strategic. C ventures is also very much focused on our demographics, which was particularly exciting for us. It also means that we are naturally more aligned with [the other companies] in their portfolio, which I’m sure will also benefit us,” said Hill.
Launched last October, C Ventures envisioned to create a portfolio stuffed with forward-thinking businesses in the media, tech, fashion and lifestyle sectors targeting the younger generations of luxury shoppers.
So far, Cheng and Ng have taken stakes in the experiential fitness retailer Bandier, Jefferson Hack’s Dazed Media, digital wardrobe manager Finery, and Moda Operandi, among others.
“We set up C Ventures to invest in companies that recognize the huge spending power of younger shoppers and also their preference for unique items and personalized content. Threads captures these trends into a game-changing luxury retail solution, with huge potential in Asia and other luxury markets,” said Ng.
Hill added that she was also looking for partners who share the company’s vision and belief that this new business model is pioneering the next big retail wave: “We are very much pushing this model forward on a global scale and there isn’t anybody else doing it to that scale within luxury. So for me it was about finding partners who believe in our vision and what we’ve set about to do and both C Ventures and Highland Europe are really interested in being at the forefront of retail.”
Tony Zappala, partner at Highland Europe, added that he was drawn to the fact that Threads is a market leader in this sector and able to answer to customers’ growing needs to shop from their mobile phones and through social channels.
As the company continues to grow, it plans to stay committed to its business model, which is focused on holding no stock and negotiating separate agreements with brands to buy its current-season stock at wholesale or at a discount. This means the business doesn’t have to sit on any stock or sell on discount and can take more risk with the trends and products it pushes.
“We are very much a platform and we are about building brand partnerships. We work very closely with luxury brands, and we can help them sell existing stock and give them insight into that younger customer base,” said Hill, also pointing to future plans to employ this business model to men’s wear and additional product categories.